Ponzi victims: Trustee is 'terrifying' - Boston Herald

Two years after Bernard Madoff's $65 billion Ponzi scheme collapsed, many of his victims seem as mad at the trustee charged with getting their money back as they are with Madoff himself.

"He's terrifying people," said Lawrence Velvel, a local Madoff victim who fears he'll learn this weekend that trustee Irving Picard has sued him.

Picard represents the Securities Investor Protection Corp., an insurance fund that pays clients of failed brokerage firms such as Madoff's up to $500,000.

In that capacity, he's been filing lots of lawsuits ahead of a statute of limitations that runs out today, the second anniversary of Madoff's arrest.

Picard has sued everyone from Madoff relatives to UBS and other big banks that allegedly did business with the scammer.

But many victims are furious that he's also going after so-called "net winners," people who took out more from their Madoff accounts over the years than they put in.

Boston philanthropist Carl Shapiro and his family, some of Madoff's biggest alleged net winners, agreed this week to give Picard $625 million to return to other scam victims.

But smaller net winners feel Picard is unfairly targeting them as well.

"I think the trustee shouldn't be suing innocent people," said Velvel, who acknowledges he took out more from his account than he put in but doesn't think he "won" anything.

Instead, Velvel feels he lost big time because his Madoff holdings evaporated overnight.

However, Picard has chosen to ignore such "losses" because investors' accounts included fake profits that Madoff created out of thin air.

The trustee is only looking at how much money people gave Madoff minus how much they took out. Anyone who got more than they put in can't get $500,000 from the SIPC - and might even face lawsuits to get their "profits" back, although Picard has promised to consider personal hardships.

Still, many Madoff investors are feeling victimized all over again.

"I think most customers feel that Picard's behavior seems motivated more by trying to save money for the SPIC than by trying to protect the consumer," said Boston attorney Dan Glosband, whose firm represents about a half-dozen local net winners that Picard has sued.